Amendment in Sec.76

[Admin TMI]

Question - what are amendment proposed in Sec.76 in Finance Bill 2015 ?

[Admin TMI]

Section 76 is being amended to rationalize penalty, in cases not involving fraud or collusion or wilful mis-statement or suppression of facts or contravention of any provision of the Act or rules with the intent to evade payment of service tax, in the following manner,-

(i) penalty not to exceed ten per cent of service tax amount involved in such cases;

(ii) no penalty is to be paid if service tax and interest is paid within 30 days of issuance of notice under section 73 (1);

(iii) a reduced penalty equal to 25% of the penalty imposed by the Central Excise officer by way of an order is to be paid if the service tax, interest and reduced penalty is paid within 30 days of such order; and

(iv) if the service tax amount gets reduced in any appellate proceeding, then penalty amount shall also stand modified accordingly, and benefit of reduced penalty ( 25% of penalty imposed) shall be admissible if service tax, interest and reduced penalty is paid within 30 days of such appellate order.

AI Summary

Finance Bill 2015 amends Section 76 to cap penalties at 10% for non-fraud cases; payment incentives outlined. Section 76 of the Finance Bill 2015 is being amended to adjust penalties in cases without fraud, collusion, or intent to evade service tax. The amendments propose that penalties should not exceed 10% of the service tax amount. No penalty is required if the service tax and interest are paid within 30 days of a notice. A reduced penalty of 25% of the imposed penalty is allowed if paid within 30 days of the order. If the service tax amount is reduced in appellate proceedings, the penalty is adjusted accordingly, with the reduced penalty benefit still applicable.